Relocating: Sell And Buy Or Sell And Rent
The most difficult part of a relocation is timing the sale of your house when finding and getting into another property in another geographic area. Because most sellers can't afford to pay two mortgages simultaneously, they often opt to temporarily stay with family or friends and take their time to buy another house after selling their own property.
However, that's usually not the case when relocating out of state or across the state and that means having to come up with a plan in order to have a place to stay in the interim. That brings up another crucial point, striking the right balance for the best timing. Timing often matters because there's a schedule to meet. The move can be especially difficult if there is limited time and you need to move before you're likely to sell your current home. In that type of situation, it's probably more preferable to rent until you sell your home.
Though renting will come at a monthly cost, it is much more affordable than buying. A short term lease in a small place gives you the ability to look and not be rushed. What's more, if you do rent, you won't incur the normal costs that are part of owning a home, like making repairs and replacing appliances.
Relocation Tips and Tricks
The very first thing you need to do in the relocation process is to find out about local market conditions and learn what your home is actually worth. Do not make an assumption that your current home is in a buyer's market or a seller's market. In addition, don't assume your home is worth "X" amount of dollars just because of the improvements you've made to it and/or because of its location. While those two things are big factors, they don't necessarily translate into heavy appreciation.
...you can temporarily live with friends or family or in a short-term rental while you’re between homes. In that case, you might need to pay for a storage facility for your possessions. A drawback to selling your home first is that you may be unable to find a home to buy, or you may feel rushed into taking a place that doesn’t meet your expectations. --Realtor.com
The next thing you want to be doing is paring down on the amount of stuff you'll have to move. Now is the time to sell, give away, and donate all that stuff you've accumulated that you don't use or rarely use. As you are downsizing your personal possessions, begin to look at the market to which you're relocating. Make a checklist of the most important things that you'll need in your new location, like schools and proximity to work.
Whatever personal possessions you have left over should be moved out of your home, or, as many as possible. Rent storage space near your new location and put your things in it and don't wait until your home sells. If you do wait, you're likely to find yourself in a huge rush and that can interrupt your life in a big way.
Sell and Buy or Sell and Rent?
The answer to this chicken or egg question really depends on two things: your income and your schedule. If you have enough equity in your current home and have sufficient income with a good debt-to-income ratio, then you might look into getting a bridge loan. Another option is to take a loan against your retirement account, but this is an alternative that should be done with the utmost caution. Sure, you'll pay yourself back the principal and interest, but if you are separated from your current employer, that loan will become due in-full; what's more, the IRS will demand its taxable percentage.
Schedule is most important usually when it relates to something other than the local real estate market itself. For instance, if you're being relocated because a new branch office is opening, or a new facility is nearing completion, you're likely not the only employee to be moving. That means you'll be in direct competition for the neighborhoods with the best schools and/or proximity to work. If there's new construction going on nearby your new location, that too will probably be a hot market.
In the end, it will all come down to budget and timing, with a healthy dose of preference. If you are comfortable with selling your home, renting for a short term, and not worried about missing an opportunity, then that's the best option. However, if you are confident your property will sell in a short time and have a the funds to bridge the gap, then it makes sense to buy right away.
Speak to a certified real estate relocation specialist as soon as possible. You're likely to gain insight and pick up more than a few pieces of good advice to help you through the transition and make your relocation a better experience.